Inequality has been increasing in
Pennsylvania for nearly two decades. This can be observed by
ranking all Pennsylvania families with children according to
their income level, dividing them into five groups (or fifths) of
equal size, and calculating the average income of each fifth of
families. This analysis shows by the mid-1990s:

The richest 20 percent of families
with children had average incomes over 12 times as large
as the poorest 20 percent of families.

The richest 20 percent of families
with children had average incomes 2.8 times as large as
the middle 20 percent of families.

The Long-Term Trend

Since the late 1970s, income inequality has
increased in Pennsylvania. The long-term economic growth of the
past two decades was not shared evenly among the poor, the rich,
and the middle class. Instead, the top fifth of families with
children fared substantially better than other income groups.

The gap between the top fifth of families
and the bottom fifth of families grew by 86 percent since the
1970s. The gap between the rich and the poor increased faster
than in all but 15 states. The gap between the rich and the
middle class increased faster than in all but 8 states.

The average income of the poorest
fifth of families fell by $3,240 between the late 1970s
and the mid-1990s, from $13,750 to $10,510.

The average income of the middle fifth
of families increased by $2,180 between the late 1970s
and the mid-1990s, from $42,493 to $44,670.

The average income of the richest
fifth of families increased by more than $37,130 between
the late 1970s and the mid-1990s, from $87,410 to
$124,540.

The Recent Trend

Over the past decade, income inequality has
increased in Pennsylvania. While the average incomes of the
richest families with children have increased since the
mid-1980s, the average incomes of the poorest fifth of families
have fallen.

The gap between the top fifth of families
and the bottom fifth of families increased between the mid-1980s
and the mid-1990s faster than in all but five states. The gap
between the rich and the middle class also increased faster than
in all but six states.

The average income of the poorest
fifth of families decreased by $1,010 between the
mid-1980s and the mid-1990s, from $11,520 to $10,510.(1)

The average income of the middle fifth
of families increased by $2,520 between the mid-1980s and
the mid-1990s, from $42,150 to $44,670.

The average income of the richest
fifth of families increased by $29,160 between the
mid-1980s and the mid-1990s, from $95,380 to $124,540

End Notes

1. The direction of this change was not
statistically significant at the 95 percent level of confidence.